Question

Eve's Apples opened for business on January 1, 2021, and paid for two insurance policies effective that date. The liability policy was $64,800 for 18 months, and the crop damage policy was $28,800 for a two-year term. What was the balance in Eve's Prepaid Insurance account as of December 31, 2021? o o o o

Answer 1

Solution 1: Computation of Prepaid Insurance Insurance 1 ($64,800 x 6/18) Insurance 2 ($28,800 x 12/24) Total Prepaid Insurance Hence, Option A)$36,000 is the correct answer $ $ $ 21,600 14,400 36,000 $ 29,300 Solution 2: Computation of Trumpeter's Net Income Service Revenue Less: Expenses Salaries Expense Miscellaneous expenses Net Income Hence, Option C)$3,700 is the correct answer $ $ $ 4,800 20,800 3,700

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